The Environmental Protection Agency (EPA) is expected to propose regulatory action to allow E15 soon, fulfilling a longstanding wish of the ethanol and corn industries, and lawmakers representing corn-heavy states.

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But the American Petroleum Institute (API) -- whose member oil companies might sell less gasoline if the policy goes through -- has launched a campaign to push back.

It argues that higher ethanol blends are unsafe for car engines, the change can't be accomplished without congressional action and such a policy would kill bipartisan momentum to reform the Renewable Fuel Standard.

"The E15 waiver is a flawed, anti-consumer policy," Frank Macchiarola, downstream group director for the API, told reporters Friday.

"With this so-called deal, the EPA would be giving the store to the ethanol lobby and sticking the American consumer with the tab," he said. "We know that there is time. They can step back from this, they can reconsider it. And that's what we're urging them to do."

Macchiarola said the group might support allowing E15 year-round, but only if Congress does it and also agrees to completely end the federal ethanol mandate in 2022.

Off to court?: Since every issue in energy policy ends up in court nowadays, it's likely that whatever the EPA does on E15 will result in litigation.

Macchiarola kept his cards close to the chest Friday, but made it clear that API won't be afraid to go to court.

"We are going to analyze the decision, but we intend to leave all of our legal options on the table," he said.

"We will respond very strongly to whatever the administration does if we don't find a fair solution to this issue."

What's next: The EPA has been tight-lipped about when it will move forward on its E15 plans, or even what it might do. But we're hearing that if something happens, it will be proposed in the coming weeks.

TGIF! Welcome to Overnight Energy, The Hill's roundup of the latest energy and environment news.

JUDGE UPHOLDS GUNNISON SAGE GROUSE LISTING: A federal judge has upheld Endangered Species Act (ESA) protections for the Gunnison sage grouse, rejecting challenges from the states that host it.

Judge Christine Arguello of the District Court of Colorado said that the Fish and Wildlife Service's 2014 decision, during the Obama administration, to list the bird as "threatened" and protect 1.4 million acres of its habitat followed the relevant laws.

"Substantial evidence supports that the near-extinction of the six satellite populations, coupled with the declining Gunnison Basin population, causes the entire species to face extinction 'in the foreseeable future,'" she wrote, quoting the ESA.

"The service thoughtfully progressed through the required analysis under the ESA, supporting its findings with scientific analyses and data," she said. "Affording it the highest deference, the court finds that the service's ultimate conclusion that the Gunnison sage-grouse is 'threatened' under the ESA was supported by reason and not arbitrarily drawn, nor was it contrary to law."

Arguello made a similar finding for the critical habitat designations.

CALIFORNIA ANNOUNCES COUNTER-PUNCH TO EPA VEHICLE ROLLBACK: California officials announced a regulatory counterpunch against the Trump administration's proposal to roll back auto emissions and fuel efficiency standards. Officials on the California Air Resource Board (CARB) announced Friday that only cars meeting the federal standards set forth in 2012 for model years 2017-2025 are compliant with the state's air pollution standards. It's a strong revoke of the Trump administration's newest proposal that would weaken the current federal emissions standards. The move essentially makes all auto manufacturers comply with the more stringent rules set out under the Obama administration in order to sell vehicles in the state.

"This will ensure California and the other 12 states that follow its vehicle rules will continue to be able to reduce climate-changing emissions from vehicles and take the necessary steps under the Clean Air Act to address air pollution and clean the air," a press release on the action read.

The other 12 states that also adopted California's emissions standards are also expected to update their regulations in a similar fashion, the release said.

The Supreme Court will kick off its 2018 term Monday by hearing arguments in Weyerhauser Co. v. Fish and Wildlife Service.

The case concerns the dusky gopher frog, an endangered species. The main question at issue is whether federal officials can designate as "critical habitat" an area of private land where the species does not currently live, but which officials believe is biologically necessary for the frog's survival.

The court's decision could have a big impact on enforcement of the ESA, with potential ramifications across government for how agencies interpret statute.

Since Kavanaugh has not been confirmed to the court, he won't be able to participate in the Weyerhauser case.